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Cabinet members oppose pay cuts as House passes FY2021 budget

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THE House of Representatives on Thursday passed the fiscal year 2021 budget bill, which includes salary cuts for cabinet members and other executive branch officials.

By a vote of 11 to 9, House Bill 21-124, which proposes to appropriate $82.6 million for government personnel and operations in FY 2021, was  passed by the House and now goes to the Senate.

Those who voted yes were its author, the Ways and Means chairman, Rep. Ivan Blanco, Speaker Blas Jonathan Attao, House Minority Leader Edwin Propst, Reps. Sheila Babauta, Joel Camacho, Luis John Castro, Jose Itibus, Richard Lizama, Tina Sablan, Edmund Villagomez and Ralph Yumul.

Those who voted no were Vice Speaker Lorenzo Deleon Guerrero, House Floor Leader John Paul Sablan, Reps. Janet Maratita, Joseph Leepan Guerrero, Joseph Flores, Donald Manglona, Antonio Borja, Roman Benavente and Marco Peter.

Some cabinet members showed up to testify against the cuts in their annual salary saying the proposed budget bill “targeted”  executive branch officials, and described the proposed pay cuts as unfair.

In his remarks prior to the roll-call vote, Blanco said, “We all know that this upcoming budget year is even worse than fiscal year 2012 when our economy hit rock bottom. Everyone is forced to…continue to provide public services [despite] steep cuts.”

He said this is an “extremely bad” fiscal year, and all must share and carry the burden together.

“I personally feel sick to my stomach because we have no choice but to allow the furlough of more than 500 career and hardworking employees. We are now forced to cut the salaries of hardworking cabinet members and agency heads. I wish this was not the case. These are extremely difficult but necessary decisions,” Blanco said.

Speaker Blas Jonathan Attao, third right, confers with other House members during a break in the House session on Thursday. Also in photo is House clerk Linda Muna, right. Photo by Emmanuel T. Erediano

 

 

Finance Secretary David DLG Atalig testifies during a House session on Thursday. Photo by Emmanuel T. Erediano

But he added that “should we realize an increase in revenues we may be able to bring back the salaries across the board, bring back our furloughed employees and reinstate the normal government operations at 80 hours.”

Blanco said a total of $300,000 taken from the salaries of cabinet members and other executive branch officials will be given to Northern Marianas College and the Commonwealth Healthcare Corp. His committee also assured that the Public School System and the judiciary will get additional funding.

H.B. 21-124 proposes to revert the executive branch officials’ annual salaries to the amount provided in Public Law 7-31, and then reduce it by 20%.

In her testimony, Special Assistant for Management and Budget Vicky Villagomez, whose salary will be reduced to $38,400 from $70,000, asked the House members “to justify the rationale or the basis” of the proposed salary deduction.

“Is it fair that the $300,000 be taken from our reduced annual earnings so that your branch…can get an increase in allocation? Where is the rationale in saving here?” she asked.

Blanco said the $300,000 that Villagomez [cited] will be given to NMC ($202,000) and CHCC ($86,000), and not to the Legislature.

Villagomez  asked, “Is it fair that our families will be affected but yours will not, because you get to take home your 100% while some us get slashed between 30% and 46%? Is it fair that you allow yourselves a one-month advance of allotment while others have to take their allocation on a monthly basis? If you want to be fair, let’s discuss fairness, let’s suffer together. Let’s not pick on a certain group, let’s change the attitude in our organization, let’s balance our solutions, not choose to be lopsided.”

For his part, Finance Secretary David DLG Atalig, whose salary will be reduced to $43,200 from $70,000, said the present economic conditions “have certainly placed a tremendous strain on the ability of the government to operate at the capacity required by our community.”

He said the loss of the islands’ sole industry, tourism, following the Covid-19 pandemic has left “a deep hole in the fabric of our lives here.”

“It is in these times that we are called to serve, to work harder and to be willing to sacrifice for the good of our people. Unfortunately, during these times there is also the temptation to take the politically appropriate route, to create victories that last only as long as a news cycle, and to turn a blind eye to the long-term consequence of our decisions,” Atalig told the lawmakers.

“The value of the earnings outlined in Public Law 7-31 no longer holds a similar economic value today. Established in 1991, this law was unable to account for approximately three decades of economic [changes]. Additionally, the CNMI standard of living has risen significantly since 1991 along with the rate of inflation. Decreasing salaries back to this level coupled with another 20% reduction is a vain attempt to cut cost without consideration of its long-term implications. With a compensation level below salary standards, the Commonwealth will be unable to attract and retain skilled workforce,” Atalig added.

Department of Lands and Natural Resources Secretary Anthony Benavente, whose salary will be reduced to $38,400 from $54,000, said the drastic cut in their salary is “uncalled for and truly unjustifiable.”

He noted that with these cuts, the salaries of some directors will be higher than those of department heads.

Special Assistant for Substance Abuse, Addiction and Rehabilitation Yvette Sablan, whose salary will be reduced  to $34,560 from $48,000, said she was standing before the House members “still at a complete loss on the logic of reducing cabinet members’ salaries.”

He asked the lawmakers why not just cut all the government branches proportionately.

“I can’t believe this is your best shot in [proposing a ] budget,” she told the House members.

Department of Public Lands-Planning Division Director Patricia Rasa said she felt that the House “is making mockery out of my time coming here,” because it appeared the lawmakers had already made up their mind to pass the budget when there should be ample time to let the department heads and cabinet members understand the budget proposal.

Press Secretary Kevin Bautista warned the lawmakers of the “[potentially] dangerous precedence” that will discourage young professionals who studied in the U.S. from returning home.

But Rep. Tina Sablan defended the budget bill and thanked the Ways and Means Committee for its “hard work” in drafting the proposal, which, she added, is a product of bipartisan effort.

She said the proposed appropriation gave “modest” additional fund to agencies that needed it most, like NMC, PSS, and CHCC.

She also said that the proposed pay cuts for cabinet members are not permanent, but temporary as required by “fiscal reality.”

She said the cabinet members’ reduced salaries, as proposed in H.B. 21-124, are still higher than any member of the Legislature.

Each lawmaker’s annual salary is $32,000 while a cabinet member’s reduced annual salary is $38,400.

Sablan said during the two natural disasters and the Covid-19 pandemic, cabinet members received overtime and extra hours pay.

“So what is fair?” she asked.

To answer the cabinet members’ allegation that they are being targeted in the new budget proposal, she reminded her colleagues that according to the Office of Personnel Management, department heads made the determination who among their employees would be furloughed.

Therefore, she added, the department and agency heads were the ones who “targeted” certain employees to be furloughed.

The more than 500 government employees were  “handpicked” by their bosses to be furloughed, she said, adding that the “due process for these government employees was violated.”

Sablan said the proposed adjustment to the cabinet members’ salaries should not be seen as punitive because “massive cuts were actually made  [to] those at the bottom as hundreds of employees are not receiving salaries at all.”

“So what is fair?” she asked.

The administration earlier said that the furloughed employees could apply for the Pandemic Unemployment Assistance and the Federal Pandemic Unemployment Compensation Program.

House Minority Leader Edwin Propst also thanked the Ways and Means Committee for its “hard work” in drafting the budget.

He said however they vote on the budget bill, “we’re going to get attacked one way or another.”

But no matter how they all look at the budget, based on the trends, “things are going to get worse before they get better.”

He recognized that it is “painful” but the Commonwealth is in dire straits right now. “It is unfortunate that cabinet members are being asked to sacrifice, or have been making sacrifices and being asked to continue to do so,” he added.

He said these days, one is lucky to have a job. There are so many in the community who can’t find a job, and many have been furloughed, he added.

“This is just the beginning. There will be more cuts in the future,” Propst said.

He also does not think that anybody in the House should be blamed for their votes on the budget bill, as everyone has to vote based on his or her conscience.

Rep. Sheila Babauta said she does not agree with Press Secretary Kevin Bautista’s claim about young professionals wanting to return home for money. She said not all those who studied in the U.S. are returning home seeking a high salary. She, too, as a young professional returned home, but not for money.

She also thanked the Ways and Means Committee and said it is the House’s duty to pass a balanced budget on time.

Vice Speaker Lorezon Deleon Guerrero said he supports most of H.B. 21-124 and he thanked Ways and Means for it hard work, but he cannot support the proposed pay cuts, adding that the bill should be sent back to committee.

“If we want to fix the economy, let’s do it the right way,” he added.

House Floor Leader John Paul Sablan said he supports “the bulk” of the budget bill, but he does not agree to the proposed cuts for cabinet members that he believes are unfair.

 

November 2020 pssnewsletter

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